João Gilberto Mendes dos Reis
Universidade Federal da Grande Dourados – UFGD, Brazil
Universidade Paulista – UNIP, Brazil
E-mail: betomendesreis@msn.com
Pedro Luiz de Oliveira Costa Neto
Universidade Paulista – UNIP, Brazil
E-mail: politeleia@uol.com.br
José Paulo Alves Fusco
Universidade Estadual Paulista – UNESP, Brazil
E-mail: jpafusco@uol.com.br
Sivanilza Teixeira Machado
Universidade Federal da Grande Dourados – UFGD, Brazil
E-mail: sivateixeira@yahoo.com.br
Submission: 28/09/2013
Revision: 19/10/2013
Accept: 08/11/2013
ABSTRACT
This paper purpose to explore the
relationships between supply chain strategies and product performance in retail
e-commerce. In this case, we concern that in current, in order to bear up under
competition, organizations have to manage their supply chains so that they meet
the needs of their final customers. With this concept in mind, the research
presented in this study focuses on establishing the right strategy for supply
chains according to their product segment. Different strategies can be used
such as lean, flexible, responsive and agile. After a Literature Review, the paper
explains a methodology based in different authors studies and shows the relationship
between supply chain strategy and types of products: functional and innovative.
Finally, the article focuses on a case of study in e-commerce retail that
describes its application in this field. The use of the right strategy for
supply chains will improve the competitive advantage of businesses.
1.
INTRODUCTION
The
technological advances have led persons to seek ever more speed of information
about quality in supply products and services by companies. In globalized
market these companies compete between supply chain and to think in necessity
each customer. Thus, everything needs to occur in the least time possible, in a
practical way, maintaining the level of quality perceived by the customer.
In
this new scenario, consumers are induced to buy their products in the most
varied ways, by telephone, stores and Internet. The Internet, in particular,
has transformed the way people have access to information, and has been used by
companies that wish to improve communication with their suppliers or even
develop new supply sources. The Internet is likewise used by consumers who wish
to sell, exchange and buy new products. The Internet, operating at network
speed, was transformed into an economic medium for carrying out transactions,
and conferred the potential for direct electronic distribution (e-distribution)
to the customer and among organizations (BOWERSOX et al., 2009).
The
Internet has allowed customers to price and choose the most diverse services
and products around the world, instantly. E-commerce and global competition has
made companies think strategically about their processes in order to manage
relationships with customers and suppliers. Customers can use the web to make
prices comparisons and check sales conditions, and suppliers can easily be
exchanged (LAUDON; LAUDON, 2011). However, the most important part of the
process is physical distribution.
Customers
want assurances that their products will arrive safely and on time. Thus, to
enter in this electronic market it is necessary to analyze supply chain
management in a more detailed manner, to understand how products, information
and funds are transferred. International business dynamics are essential in
supply chain strategies in a global environment (JEONG; HONG, 2007).
Companies
have had to make an appraisal and establish a position within their supply
chains, including their product and service flows within these chains for the
purpose of meeting all the requirements of their customers. Many researchers
are studying the challenges of supply chain management in the business
environment (CÔRREA, 2010; CHRISTOPHER, 2011; CHOPRA; MEINDL, 2012).
In
this context, supply chain strategies may be different according to the
approach taken by network, as in the search for elimination of waste, the
ability to make processes more flexible, the ability to respond to markets and
agility in serving volatile markets. In effect, these strategies are related to
the characteristics of the products made by the network, which may be of an
innovative or functional nature (FISHER, 1997; CHRISTOPHER, 2000; LEE, 2002; SELLDIN;
OLHAGER, 2007; WU; BARNES, 2010).
Nowadays
many different products can be sold by the internet, this products are
classified as innovative or functional. In this context, which the best supply
chain strategy for internet retail? This paper shows concepts involved in
supply chain management strategies and business-to-customer operations and
analyze the right supply chain strategy using a methodology based in literature
review. The empirical process to apply this methodology was made throughout a
case of study in an internet retail.
In
addition the objective of this paper can be described as create an empirical
methodology to identify the right supply chain strategy to products sold by the
internet.
2. LITERATURE REVIEW
The
supply chain conception started in the 1980s and it has evolved into a very
important business concept. Smart (2008) explains that over this time supply
chain has been transformed from primarily an operational activity focusing on
distribution to a strategic concept which spans functions and crosses
inter-organizational boundaries.
The
definition of supply chain and its components is the first step toward
understanding its importance. Many authors have contributed with ideas and
definitions on the subject, using a wide range of terms, such as supply chains,
organizational networks, and supply networks (PIRES, 2009; SLACK et al., 2010; CÔRREA,
2010; CHRISTOPHER, 2011; CHOPRA; MEINDL, 2012).
There
are many ways of understanding and interpreting these definitions. Pires
(2009), for example, defines “supply chain” as a network of independent or
semi-independent companies responsible for obtaining, producing and delivering
a determined product or service to the end customer. Slack et al. (2010)
affirms that no network exists independently; all operations are part of a
larger network, interconnected with other operations. A network consists of a set
of relationships between customers and suppliers.
Laudon
and Laudon (2011) explain that the supply chain is a network of organizations
and business processes to select raw materials to transform them into
intermediate and finished products and distribute the finished products to
customers. The supply chain connects suppliers, industrial plants, distribution
centers, means of transportation, retail stores, and information by means of
processes such as selection of raw materials, inventory control, distribution
and delivery, for the purpose of providing products and services from the
source up to the point of consumption.
Supply
chain management involves a lot more than just cost management since it affects
other aspects, such as performance, speed and reliability of deliveries, the
quality of the products, and, finally, the flexibility with which the network
can adapt (CORRÊA, 2010). Thus, supply chain management covers all activities
related to the flow and transformation of goods from the raw material stage
(extraction) up to the end user, as well as the respective flows of
information. So, involves integration of these activities through establishment
of improved relationships in the supply chain for the purpose of gaining a sustainable
competitive advantage. Integration of all activities in the supply chain allows
companies to gain sustainable competitive advantages, advantages which may be
produced and maintained (HANDFIELD; NICHOLS, 2002).
Furthermore,
supply chain management is management of upstream and downstream relationships
with suppliers and customers in order to deliver superior value at the lowest
cost for the entire supply chain (CHRISTOPHER, 2011).
Throughout
the 20th Century, companies implemented different production strategies, such
as agile, responsive, flexible and lean manufacturing (GODINHO FILHO, 2004). This
has meant that, over the last few years, many authors, such as Vickery et al.
(1999), Christopher (2000; 2011), Chase et al. (2005), Pires (2009), Corrêa
(2010), Merschmann and Thonemann (2011), have studied different types of
management strategies for these networks, proposing that they are directly
related to manufacturing paradigms.
Therefore,
it is possible to say that these paradigms came to make up the strategies to be
adopted by the different supply chains. Thus, what is known as agile
manufacturing may be known as an agile supply chain when dealing with the
companies present in the network as a whole.
The strategies of supply chains depend on the types of products and
services that are traded, and also on their supply and demand conditions.
Fisher
(1997), creator of the concept of functional and innovative products, says that
supply chains suffer from the excess of some products and lack of others,
through the inability to forecast demand, and that an effective supply chain
strategy goes beyond just considering the nature of demand for company
products, but must consider many other aspects, such as the life cycle of the product,
predictability of demand, variety of products, standardization of the market in
relation to delivery and service time (percentage of demand met by products in
stock). Thus Fisher (1997) and Côrrea (2010), classify products, based on
standards of demand, in two categories:
• Functional products: these are products
which satisfy basic needs of the consumer and which do not change much over
time, having stable and predictable levels of demand and long life cycles. This
stability generates competition, which in turn leads to low profit margins.
• Innovative products: these are the
products which, through innovation and technology, become popular at certain
times and generate, for the consumer, an additional attraction to buy these
products. This leads to an increase in profit margins. However, the demand for
these products is unpredictable, the life cycle is short (only a few months)
and they suffer from imitations from other companies, which reduce or even
eliminate the original competitive edge, making the company live in cycles of
innovations.
It is
necessary to establish if products are functional or innovative, even though
this may be done by managers based on the products with unstable and stable
demand (Table 1)
Table 1 – Functional
versus innovative products
Features |
Functional |
Innovative |
Aspects of demand |
Predictable |
Unpredictable |
Product life cycle |
More than 2 years |
3 months to 1 year |
Contribution margin |
5% to 20% |
20% to 60% |
Product variety |
Low (10 to 20 variants per
category) |
High (often millions of variants
per category) |
Average
margin of error in the forecast at the time production is committed |
10% |
40% to 100% |
Average stockout rate |
1% to 2% |
10% to 40% |
Average
forced end-of-season markdown as percentage of full price |
0% |
10% to 25% |
Lead time
required for made-to-order products |
6 months to 1 year |
1 day to 2 weeks |
Source: Adapt of Fisher 1997
Fisher
(1997) says that companies must to be sure determine whether their products are
functional or innovative to be sure the right approach about supply chain
strategy. In his vision we are able to apply two types of strategy: Efficient
Supply Chain Strategy and Responsive Supply Chain Strategy. However, before we
need to decide whether company´s supply chain is Physically Efficient Process
(PEP) or Market Responsive Process (MRP). Table 2 shows the comparison between
one and another.
Table 2 – Physically efficient
process versus Market responsive process
Features |
PEP |
REP |
|
Primary Purpose |
supply
predictable demand
efficiently at the lowest possible cost |
Respond
quickly to unpredictable demand in order to minimize stockouts, force
markdowns and obsolete inventory |
|
Manufacturing Focus |
Maintain
high average utilization rate |
Deploy excess buffer capacity |
|
Inventory Strategy |
Generate
right turns and minimize inventory throughout the chain |
Deploy
significant buffer excess stock of parts and finished goods |
|
Lead Time Focus |
Short
lead time as long as it doesn´t increase costs |
Invest
aggressively in ways to reduce lead time |
|
Approach to Chossing Suppliers |
Select
primarly for cost and quality |
Select
primarly for speed, flexibility and quality |
|
Product Design Strategy |
Maximaze
performance and minimize cost |
Use
a modular design in order to postpone product differentiation for as long as
possible |
|
Source: Adapt Fisher (1997)
Christopher
and Towil (2000), Pires (2009) classify supply chain strategy in Lean Supply
Chain and Agile Supply Chain. The made a comparison of attributes between Lean and
Agile Supply Chain (Table 3).
Lee
(2002) connected this study in a matrix that consider supply and demand
uncertainties related to supply chain strategies and also to types of products.
Subsequently, authors such as Chase et al. (2005) and Corrêa (2010) lent great
prominence to this contribution (Figure 1).
Table 3 – Comparasion of lean
supply chain and agile supply chain
Distiguishing attributes |
Lean Supply Chain |
Agile Supply Chain |
Typical products |
commodities |
Fashing goods |
Marketplace demands |
predictable |
volatile |
Product variety |
low |
high |
Product life cycle |
long |
short |
Customer drives |
cost |
availability |
Profit margin |
low |
high |
Dominant costs |
Physical costs |
Marketability costs |
Stockout penalties |
Long term contractual |
Immediate and volatile |
Purchasing police |
Buy goods |
Assign capacity |
Information enrichment |
Highly desirable |
obligatory |
Forecasting mechanism |
algorithmic |
consultative |
Source: Adapt Christopher and Towil
(2000)
|
|
Demand Uncertainty |
||
|
|
Low (Functional Products) |
High (Innovative Products) |
|
Supply Uncertainty |
Low (Stable Process) |
Grocery, basic apparel, food, oil and gas Efficient or Lean Supply Chains |
Fashion apparel, computers, pop music Responsive Supply Chains |
|
High (Evolving Process) |
Hydro-electric power, some food produce Risk-Hedging or Flexible Supply
Chains |
Telecom, high-end computers, semiconductors Agile Supply Chains |
||
Figure
1 – Uncertainties and Supply Chains Strategies.
Source: adapt Lee (2002)
According
to the model proposed by Lee (2002), supply chains are divided up into four
types: lean or efficient supply chains; responsive supply chains; supply chains
with minimum or flexible risk, treated as flexible supply chains; and agile
supply chains.
According
to Womack et al. (2007), new ideas emerge from the set of conditions under
which the old ideas no longer seem to work. This fact explains why the Japanese
auto industry has brought so many contributions to production. The lean way of
thinking to produce without waste, together with development of quality, has
provided a competitive advantage to those companies.
Lean
thinking was responsible for major change in the production paradigm in the
20th Century. Naylor et al. (1999) state that this concept consists of
development of a continuous flow of value to eliminate all waste, including
waste of time. This thinking is translated in the Toyota Production System
(TPS), whose focus, according to Agarwal et al. (2006), lies in the reduction
and elimination of waste.
Lean
manufacturing is a new approach that offers a better way of organizing and
managing company relationships with customers, the supply chain, product
development and production operations, using ever fewer resources in production
operations (WOMACK et al. 2007). That way, the lean approach may be applied
throughout the Supply Chain, reducing losses by business partners within these
networks. This can be remarkably important when dealing with products with low
levels of profitability.
Flexibility
was a concept that emerged from the industry, based on the Toyota Production
System. After the Second World War, Japan lacked resources for production.
Companies did not have enough capital to acquire the same amount of machinery
and equipment to compete with the mass production industries of the Western
world, so they had to have flexibility to optimize their productive activities
(WOMACK et al., 2007).
The
success achieved by Japanese companies such as Toyota, and subsequent
technological development, was what made flexibility concepts known throughout
the world, and after that, they came to be used by many researchers in various
aspects of operations management. These concepts have especially been used in
contributions involving supply chain processes.
Gong
(2008) says that manufacturing companies, faced with keen competition, have
developed the ability of dealing with internal and external uncertainties by
making use of flexibility. This is a goal to pursue within organizations.
To
understand the concept of flexible supply chains, it is necessary to understand
what flexibility means. According to Upton (1994), flexibility can be defined
as the ability to change or react with little penalty in time. On the other
hand Fusco (2004) argues that flexibility reflects the actual situation of a
company, a set of capabilities intrinsic to it, and the result or final
potential of handling changes (planned or not) in a broader scenario.
When
the issue is a network of companies, flexibility in operations is essential to
existence in the market. A supply chain cannot be something immutable; it is
necessary that the organization have flexibility in its operations rapidly,
whether in production, logistics, marketing or supply. That is only possible
through exchange of information in the various links of the chain. According to
Vickery et al. (1999), the flexibility of supply chains may well represent a
potential source for improving company efficiency, and it is a significant
measure of the performance of the supply chain.
The
time factor is crucial in any logistics operation since any good or service
will only have value when it is available to the customer at the right time and
place. According to Ballou (2003), the mission of supply chain management is
placing the right products or services in the right time, at the right place,
in the desired condition, thus allowing a higher contribution to the company.
At the same time, it is important to achieve this condition without the need
for increasing the quantities of stock in the supply chain, which, according to
Ballou (2003), may represent from 12% to 40% of all logistics costs. The
challenge of the responsive supply chain model is to identify ways of becoming
faster in responding to its main goal, which is, customer service and
maintenance of service costs at acceptable levels.
What
supports a responsive supply chain or, as some authors describe, the logistics
of rapid response, is the use of competitive advantages based on time, using
systems that are responsive and fast (CHRISTOPHER, 2011). Stalk and Hout (2003)
argue that for a responsive strategy, it is necessary that the company direct
its efforts to customers most sensitive to the question of time. In a supply
chain oriented to e-commerce, customers do not receive the product at the time
of purchase. Thus, delivery time is essential to the process.
The
main difference between the responsive supply chain and the agile supply chain
is that the former considers operational and production costs within the
context of the supply chain (GUNASEKARAN et al., 2008).
Martin
Christopher was one of the first to introduce the concept of agility in the
supply chain, in an article he wrote in the year 2000, “The agile supply chain”
(CHRISTOPHER, 2000), and also in his book “Logistics and Supply Chain
Management” which came out at the end of the 1990s (CHRISTOPHER, 2011). These
works were followed by a series of research studies which were published in
several periodicals, studies considered as fundamental for the concept of the
agile supply chain. These studies are cited and used by several researchers in
a variety of periodicals, including, among others, the research studies
conducted by Power et al. (2001), Ismail and Sharifi (2006), Ramesh and
Devadasan (2007), Luo et al. (2009), Wu and Barnes (2010).
According
to Kidd (1994), agile manufacturing can be considered a structure within which
each company is able to develop its own business strategies and products, being
supported by three pillars: organization, people and technology. The study of
agility of companies arises in the manufacturing sector in the early 90s,
linked with the term agile manufacturing. The concept was popularized by a
group of professors from the Iaccoca Institute in the United States after the
publication of a report involving more than 150 executives from industry,
describing how American competitiveness would be developed in the next 15 years
(GODINHO FILHO, 2004).
Agile
manufacturing is the ability to survive and thrive in a competitive
environment, with rapid service and punctuality as the main objective.
According to Pires (2009), the word “agile” means a focus on achieving a
productive system that is able to adapt and respond quickly to market changes,
i.e., it is more responsive. The author argues that the main characteristics of
the agile supply chain (SC) are flexibility and availability.
On
the other hand, for Krajewnski et al. (2012), the focus of agile supply chains
is reaction time, with the goal of avoiding costly inventories that end up
being sold at major discounts. The objective is maintaining availability to the
customer and avoiding the depletion of stocks, avoiding, at the same time,
losses through obsolescence of products.
Nowadays
e-commerce has the potential to revolutionize the way a business is run (SHARIFI
et al., 2012). In fact, e-commerce has evolved in the last few years into a
wide range of relationships known as e-business, making it possible to increase
the speed of the order cycles. As a result, customers can do business more
easily than ever, particularly when a mix of price, quality, and speed of
response represents an important requirement.
Laudon
and Laudon (2011) refer to the concept of e-business or electronic business as
the use of digital technology and the Internet to carry out the main business
processes of a company. Smart (2012) presents the importance of applying new
mechanisms of e-business to compose supply chains. Relationships between
companies and consumers may occur in four ways, according to Slack et al.
(2010):
• Business to Business (B2B): in which
one organization may undertake electronic transactions with another. This is a
very common practice between retailers of a hypermarket that adopt electronic
purchasing systems and their suppliers, known as EDI – Electronic Data
Interchange, to facilitate replacement of their merchandise.
• Customer to Business (C2B): in which
the customer relates to businesses, defining his intentions of consumption,
such as price and characteristics of the products, and the organizations decide
whether to serve that demand generated under the conditions requested. Can
involve some operators of airline tickets and reservation sites.
• Business to Customer (B2C): in which
companies create Internet portals to sell their products, opening another
channel of relationship with their customers and reducing the costs of making
products available on the physical market.
• Customer to Customer (C2C): consists of
the relationship between consumers through the virtual environment. This
involves the exchange portals between consumers and electronic auction, such as
“e-bay”, in which Internet users can announce and sell their products.
3. METHODOLOGY
The purpose
of this work is create a methodology to identify the right supply chain
strategy in e-commerce context. For development of the methodology of this
study, the following procedures were adopted:
(a) A
review of the literature was developed to understand the supply chain
strategies, as well as concepts that allow development of a methodology for
creating a typology for product relationship and supply chain strategy.
(b) Based
on the studies of Fisher (1997), Christopher and Towil (2000), Lee (2002),
Chase et al. (2005), Pires (2009) and Corrêa (2010), a table was developed with
the characteristics that allow classification of the product in relation to the
supply chain strategy to be applied (Table 4). To identify the right supply
chain to apply we need identify all characteristics presents in Table 4 about
the product chosen. Consequently using this datas we check all row of table evaluating
the product. Finally, to determine the right supply chain strategy we consider
the number of answers. For instance, a product with more characteristics of
column two need a lean supply chain strategy, column three flexible and so on.
Table 4 – Supply
chain strategies aligned with product characteristics
Item |
Lean SC |
Flexible SC |
Responsive SC |
Agile SC |
Typical Products |
Grocery, basic apparel, food, oil and gas |
Hydro-electric power, some food produce |
Fashion apparel, computers, pop music |
Telecom, high-end computers, semiconductors |
Demand |
Predictable |
Predictable |
Volatile |
Volatile |
Variety of Products |
Low |
Low |
High |
High |
Product Life Cycle |
Long |
Long |
Short |
Short |
Customer Drivers |
Cost and Quality |
Cost and Quality |
Availability |
Availability |
Profit Margin |
Low |
Low |
High |
High |
Dominant Costs |
Physical Costs |
Physical Costs |
Marketing Costs |
Marketing Costs |
Supply Uncertainty |
Low |
High |
Low |
High |
Purchase police |
Buy goods |
Buy goods |
Assign capacity |
Assign capacity |
High Quality of information, especially
about demand |
Highly desirable |
Highly desirable |
Obligatory |
Obligatory |
Forecast Mechanism |
Algorithm |
Algorithm |
Advisory |
Advisory |
Type of product |
Functional |
Functional |
Innovative |
Innovative |
(c) Furthermore,
this work has objective study internet market, so we apply our methodology in a
case of study in electronic business company of the B2C type. Seuring (2008)
says that a case of study is more suitable when conducting business research. We
sought to characterize the company and show the product classification
methodology in relation to the supply chain strategy for the purpose of showing
how the company can classify its diverse products in one of the four categories
to align its sales and distribution strategies so as to meet customer
requirements and gain a competitive advantage.
4.
RESULTS AND DISCUSSION
The
company researched was founded in the city of Niteroi, Rio de Janeiro in 1929
by a group of Americans who came from the U.S. to open a “Five and Ten Cent”
store in Buenos Aires. This was a specific kind of store that was very
successful in the United States and Europe for selling low price products.
However, during their trip on the ship, they met some Brazilians who invited
them to visit Rio de Janeiro and they ended up staying there. At the end of the
first year, there were three stores in Rio and one in São Paulo.
At
the end of 1999, the company entered the e-commerce market with the creation of
a subsidiary formed by six other companies that held shares representing 33% of
the capital stock of this new company. Expansion of the department store
continued in 2003. In addition to the opening of more physical stores, they
opened other compact stores known as Express Shops. In 2005, they acquired a TV
channel with the same name as their e-commerce site, and created a joint
venture with a well-known bank in order to carry out loans and financing in
their stores.
In
2006, a company was created to manage the merger of their portals with another
recently acquired one, then maintaining a 53.25% stake of the capital. In 2007,
they acquired a well- known brand for video rental, in which, in addition to
exploiting the physical network, they will utilize the brand by renting films
through the Internet starting in 2008. The division of the companies in the group
is shown in Figure 2.
Company Administrator e-commerce
100 % 53,25% 50%
Physical Retail Retail Stores Express Shops Video Rentals Financial Products Financing
Figure
2 – Composition of the business of the company researched
The
company sells various types of products in 36 departments, such as food and
drinks, home appliances, electronics, furniture, stationery, computer products
and others. Certainly, each type of product establishes different strategic
needs, in other words, there are products that are more functional and require
lean and flexible network strategies and there are more innovative products
that require more responsive or agile strategies.
Due
to the variety of products that the retailer has available on the market, there
will evidently be products classified in all the strategies. The idea proposed
in this article is to make it possible for the company to classify these
products through the proposed methodology and thus adopt the strategies
corresponding to each class of product. As an illustration of the application
of the model, two products offered by the company were chosen: dairy products
and notebooks. The characteristics of the two types of products may be
described in Table 5.
Table 5 – Type
of products analyzed in supply chain strategy context
Aspects |
Product
1 |
Product
2 |
Basic
Products |
Dairy
Products |
Notebooks |
Demand |
Predictable |
Predictable |
Variety of Products |
Low |
High |
Product Life Cycle |
Long |
Short |
Criteria of Winning Orders |
Cost
and Quality |
Availability |
Profit Margin per unit |
Low |
Low |
Dominant Costs |
Physical
Costs |
Marketing
Costs |
High Quality of
information, especially about demand |
Highly
desirable |
Obligatory |
Forecast Mechanism |
Algorithm |
Advisor |
To
determine the characteristics of the types of products, information obtained
from the company by various means were used, such as interviews, management
reports and accounting documents. Based on these data, the characteristics of
each one of the products may be established. These data present in Table 3 are
cross referenced with the data from Table 2.
Concerning
to results from interaction between characteristics expected and observed of
goods at company this study of case, it is possible to determinate some points
of view, as following:
(a) Dairy
products are classified as functional products with predictable demand and low
uncertainty of demand; therefore, they need a lean supply chain strategy, with
a view toward eliminating losses that have a direct impact on their results.
(b) Notebooks
have a volatile demand; however, they are in a mature production stage, which
reduces the supply uncertainties. Their sale depends on the availability of the
models on the market, and may thus be characterized as an innovative product
which requires a responsive supply chain strategy.
Therefore, for the electronic retail company, it is
necessary to align the supply chain strategy of the dairy products in a lean
strategy, eliminating waste, which involves more agile logistics, reduction of
stock, elimination of redundant operations and continual flow, among other
practices.
In
regard to notebooks, a responsive strategy is suitable; in other words, the
supply chain should be aligned so as to reduce response time, which is
essential for electronic commerce since, if the chain is not able to meet the
needs in the least time possible, it will lose the competition to a traditional
retail supply chain. This requires the
use of computational tools and rapid response logistics to meet customer
demands. However, one must not lose track of costs, the key point for
responsive supply chains, because the margins of the products in this stage of
development are less than those characterized in the context of the agility,
which allows a greater operating cost.
Thus,
the methodology needs to be determined for the diverse products sold by the
company so as to apply the correct strategy for each group of products,
allowing effective management of their supply chains.
The methodology presented in this paper will hardly respond to all the questions
proposed for it, as seen in the survey that was carried out. However, it is
possible to see some convergence, which allows companies to prepare more
profitable strategies compared to the traditional ones. The methodology
presented is not immutable and it can be extended by the inclusion of other
factors that could be examined through new research or practical applications
in the business world. Another factor to be considered, also in future
research, would be the applicability of mixed operations in supply chain
strategies, such as use of the “leagile” concept, which corresponds to a
strategy concept where the supply chain is lean in the early stages and becomes
agile more toward the end of the product and service delivery process.
5.
CONCLUSION
Based on the characteristics identified in the study, it was possible to
conclude that an e-commerce supply chain varies according to the product and
segment in focus. This fact leads us to consider that it is not possible to
establish a fixed model for the entire operations network; on the contrary, it
is necessary to develop segmented strategies for each supply chain and specific
groups of products.
E-commerce companies that adopt differentiated supply chain strategies
for each product may possibly acquire advantages over those companies that do
not operate in this manner. It is important to consider that for each product
there is a different way of reaching the customer. This could be better
established if market research were made to analyze the typical priorities of
each specific segment of the consumer market in e-commerce.
E-commerce increase demand and product variety year by year, so its
important the all supply chain follow this scenario acting in the right
context, for instance whether products are commodities and had short profit
margin the companies need adopt lean supply chain strategies to be competitive.
We believe that this paper reached the objective to show a methodology
to identify the right supply chain strategy. As the focus was the internet
scenario we presented a case of study using a e-commerce retail in Brazil. The
purpose of case of study was illustrated the methodology, next step of research
is evaluated different companies in this segment to determine the scope of the
methodology developed here.
One limitation
is that the methodology study focuses on only two e-commerce segment; future
studies may go further in refining the proposed framework for other segments.
AGARWAL, A.; SHANKAR, R.; TIWARI, M. K. (2006) Modeling the metrics of
lean, agile and leagile supply chain: an ANP-based approach, European Journal of Operations Research,
v. 173, n. 1, p. 211-225.
BALLOU, R.H. (2003), Business
Logistics: Supply Chain Management, Prentice Hall: Upper Saddler River, NJ.
BOWERSOX, D. J.; CLOSS, D. J.; COOPER M. B. (2009) Supply Chain Logistics Management, McGraw-Hill: New York, NY.
CHASE, R. B.; JACOBS, F. R.; AQUILANO, N. J. (2005) Operations Management for Competitive advantage, McGraw-Hill: New
York, NY.
CHOPRA, S.; MEINDL, P. (2012) Supply
Chain Management: Strategy, Planning and Operation, Prentice Hall: Upper
Saddler River, NJ.
CHRISTOPHER, M.; TOWIL, D. R. (2000) Supply chain migration from lean
and functional to agile and customized, Supply
Chain Management: An International Journal, v. 5, n. 4, p 206-213.
CHRISTOPHER, M. (2011) Logistics
and Supply Chain Management, FT Press: Upper Saddler River, NJ.
CHRISTOPHER, M., (2000) The agile supply chain: competing in volatile
markets, International Marketing
Management, v. 29, p. 37-44.
CORRÊA, H. L. (2010) Supply
Network Management, Atlas: São Paulo.
SELLDIN, E.; OLHAGER, J. (2007) Linking products with supply chains:
testing Fisher's model, Supply Chain
Management: An International Journal, v. 12, n. 1, pp. 42-51.
FISHER, M. (1997) What is the right supply chain for your product?, Harward Business Review, March-April
1997, p. 105-115.
FUSCO, J. P. A, (2004) Supply
Chain and Enterprises Network, Arte e Ciência: São Paulo.
GODINHO FILHO, M.; FERNANDES, F. C. F. (2009) Strategic Paradigms for
Manufacturing Management (SPMM): Key elements and conceptual model, International
Journal of Industrial Engineering:
theory, applications and practice, v. 16, n. 2, p. 147-159.
GONG, Z. (2008) An economic evaluation model of supply chain flexibility,
European Journal of Operation Research,
v. 184, p. 745-758.
GUNASEKARAN, A.; KEE-HUNG, L.; CHENG, T. C. E. (2008) Responsive supply
chain: a competitive strategy in a networked economy, The International Journal of Management of Science, v. 36, p. 549-564.
HANDFIELD, R. B.; NICHOLS, E. L. (2002) Supply Chain Redesign: Transforming Supply Chains into Integrated Value
Systems, FT Press: Upper Saddler River, NJ.
ISMAIL, H. S.; SHARIFI, H. (2006) A balanced approach to building agile
supply chains, International Journal of
Physical Distribution & Logistics Management, v. 36, n. 6, p. 431-444.
JEONG, J. S.; HONG, P. (2007) Customer orientation and performance
outcomes in supply chain management, Journal
of Enterprise Information Management, v. 20, n. 5, p. 578-594.
KIDD, P. T. (1994) Agile
Manufacturing, Addison-Wesley: New York, NY.
KRAJEWSKI, J. L.; RITZMAN, L. P.; MALHOTRA, M. K. (2012) Operations Management: Processes and Supply
Chains, Prentice Hall: Upper Saddler River, NJ.
LAUDON, K. C.; LAUDON, J. P. (2011) Management
Information System, Prentice Hall: Upper Saddler River, NJ.
LEE, H. L. (2002) Aligning supply chain strategies with product
uncertainties, California Management
Review, v. 44, n. 3, p. 105-119.
LUO, X.; WU, C.; ROSENBERG, D.; BARNES, D. (2009) Supplier selection in
agile supply chains, an information-processing model and illustration, Journal of Purchasing & Supply Chain
Management, v. 15, p. 249-262.
MERSCHMANN, U.; THONEMANN, U. W. (2011) Supply chain flexibility,
uncertainty and firm performance: an empirical analysis of German manufacturing
firms, International Journal of
Production Economics, v. 130, p. 43-53.
NAYLOR, J. B.; MOHAMED, M. N.; BERRY, D. (1999) Leagility: integration
of the lean and agile manufacturing paradigms, International Journal of Production Economics, v. 62, p. 107-118.
PIRES, S. R. I. (2009) Supply
Chain Management, Atlas: São Paulo.
POWER, D. J.; SOHAL, S. A.; RAHMAN, S. U. (2001) Critical success
factors in agile supply chain management: an empirical study, International Journal of Physical
Distribution & Logistics, v. 31, n. 4, p. 247-265.
RAMESH, G.; DEVADASAN, S. R. (2007) Literature review on the agile
manufacturing criteria, Journal of
Manufacturing Technology Management, v. 18, n. 2, p. 182-201.
SEURING , S. A. (2008 ) Assessing the rigor of case study research in
supply chain management, Supply Chain
Management : An International Journal, v. 13 n. 2 , p. 128-137.
SHARIFI, H.; ISMAIL, H. S.; REID, I. (2006) Achieving agility in supply
chain through simultaneous design of and design for supply chain, Journal of Manufacturing Technology
Management, v. 17, n. 8, p. 1078-1098.
SLACK, N.; CHAMBERS, S.; JOHNSTON, R. (2010) Operations Management, Prentice Hall: Upper Saddler River, NJ.
SMART, A. (2008) E-Business and supply chain integration, Journal of Enterprise Information
Management, v. 21, n. 3, p. 227-246.
STALK, G.; HOUT, T. (2003) Competing
Against Time, The Free Press: New York, NY.
UPTON, D. M. (1994) The management of manufacturing flexibility, California Management Review, v. 36, n.
2, p. 72-89.
VICKERY, S.; CALATONE, R.; DROGE, C. (1999) Supply chain flexibility: an
empirical study, International Journal
of Operations and Production Management, v. 35, n. 1, p.16-24.
WOMACK, J. P.; JONES, D. T.; ROOS D. (2007) The Machine That Changed the World: The Story of Lean Production:
Toyota's Secret Weapon in the Global Car Wars that is Now Revolutionizing World
Industry, Free Press: New York, NY.
WU, C.; BARNES, D. (2010) Formulating partner selection criteria for
agile supply chains: a dempster-shafer belief acceptability optimisation
approach, International Journal of
Production Economics, v.125, p. 284-293.